EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1001654
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Boc Ltd applied for a TCO in respect of certain welders on 11 January 2010.
Instrument
TCO No 1001654 was made on 09 April 2010. It declares that those certain welders are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 1001654 is taken to have come into force on 11 January 2010.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs and excise through the imposition of tariffs on imported goods. It includes provisions for Tariff Concession Orders (TCOs) which allow for a reduction or exemption of customs duty on certain goods under specific conditions. This was introduced to address the need for flexibility in tariff application to support economic policies, trade agreements, and industry development by providing relief to businesses importing specific goods. The instrument F2010L02001, known as Tariff Concession Instrument No. 1001654, was made under the authority of the Customs Act to provide tariff concessions for certain welders, effective from 11 January 2010. The policy objective is to ensure that businesses importing these goods are not unfairly burdened by high customs duties, thus facilitating smoother trade and supporting industrial growth.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the application of tariff concession orders (TCO) for specific goods, effectively reducing customs duty rates. This applies to entities such as Boc Ltd, which sought a TCO for certain welders. The Act mandates that the Chief Executive Officer of Customs (CEO) must evaluate applications against core criteria, including the absence of substitutable goods produced in Australia. If the CEO determines that the application meets these criteria, they must issue a TCO, which was the case for TCO No. 1001654, declaring that the specified welders are subject to a zero duty rate as of the date the application was lodged, 11 January 2010. This Act applies on a national level across Australia and is subject to the Customs Tariff Act 1995 for the prescribed duty rates. The Act does not impose any retroactive liabilities or disadvantages to persons other than the Commonwealth and allows for potential duty refunds for importers as per the Customs Regulations.
Key Provisions
The Tariff Concession Instrument No. 1001654, issued under the Customs Act 1901, pertains to the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This instrument, which came into effect on 11 January 2010, provides for a tariff concession on certain welders, reducing the duty from 5% to free (section 269P(3)). The CEO was satisfied that no substitutable goods were produced in Australia in the ordinary course of business at the time of the application, which is a core criterion under section 269C of the Act.
The obligations imposed on parties under this Act primarily involve the application process for a TCO. An applicant, such as Boc Ltd, must submit an application to the CEO under section 269F, ensuring it pertains to goods not specified in section 269SJ of the Act. The CEO then evaluates the application against the core criteria and, if satisfied, must make a written order declaring the goods subject to a concession (section 269P(3)). The CEO also has a duty to publish a notice in the Gazette under subsection 269K(1) inviting submissions regarding the application, although in this case, no submissions were received.
Under the Customs Act 1901, breaches of the conditions set forth in the TCO could result in civil or criminal penalties. The Act does not explicitly state the penalties for non-compliance; however, violations of customs regulations generally attract penalties under the Crimes Act 1914, which can include fines and imprisonment. The specific penalties would depend on the nature and severity of the breach, as outlined in the relevant sections of the Crimes Act 1914. Additionally, the Act ensures that the TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person, as provided under subsection 269S(1).